Question
Distinguish between Current Assets and Fixed Assets.
✓
Answer
Difference between Fixed Assets and Current Assets:
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Basis
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Fixed Assets
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Current Assets
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1.
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Nature
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These are long-term resources of a business.
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Thses are short-term resource of a business.
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2.
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Purpose of Holding
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These assets are used to operate the business and to earn profits.
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These assets are realised in cash or consuned during the normal operating of business.
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3.
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Valuation
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These assets are valued at cost less depreciation.
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These assets are valued at cost or net area isable value (market price), whichever is less.
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4.
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Sources of Finance
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These assets are acquired out of long-term funds of the business.
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These assets are acquired out of short-term funds of the business.
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5.
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Subject to Change
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These assets are not usually subject to change.
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These assets are usually subject to change.
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6.
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Profit on sale
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Profit on sale of these assets is capital profit.
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Profit on sale of these assets is revenue profit.
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Find out the credit purchases from the following:
| ₹ | |
| Balance of creditors April 01, 2016 | 1,80,425 |
| Balance of creditors March 31, 2017 | 26,000 |
| Cash paid to creditors | 24,000 |
| Cheque issued to creditors | 37,200 |
| Cash purchases | 32,200 |
| Discount received from creditors | 1,99,000 |
| Discount allowed | 26,000 |
| Bills payable given to creditors | 2,09,050 |
| Return outwards | 8,97,000 |
| Bills payable dishonoured | 1,40,000 |
| Bills receivable endorsed to creditors | 4,500 |
| Bills receivable endorsed to creditors dishonoured | 1,800 |
| Return inwards | 3,700 |
From the following information, calculate Total Sales made during the period:
| ₹ | |
| Debtors as on 1st April, 2017 | 20,400 |
| Cash received from debtors during the year (as per Cash Book) | 60,800 |
| Returns Inward | 5,400 |
| Bad Debts | 2,400 |
| Debtors as on 31st March, 2018 | 27,600 |
| Cash Sales (as per Cash Book) | 56,800 |
State what do you understand by accounting reports.
Give the rectifying entries of the following:
- Sales of ₹ 20,000 to Manoj were recorded as ₹ 2,000 in the Sales Book.
- An amount of ₹ 25,000 spent for the extension of machinery has been debited to the Wages Account.
- Discount received from Ram & Co. ₹ 350, has not been entered in the discount column of the Cash Book.
- Goods of ₹ 3,000 sold to Mahesh were recorded in the Purchases Book.
Enter the following transactions in the Double Column Cash Book of M/s. Gupta Store:
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2019
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₹
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June 1
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Cash in Hand ₹ 800, Bank overdraft ₹ 5,700
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June 7
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Received a cheque from Bharati, discount allowed ₹ 150
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3,250
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June 9
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Deposited the above cheque into Bank
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June 15
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Cheque received from Panna Lal
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1,200
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June 20
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Bharati's cheque returned dishonoured
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June 28
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Panna Lal's cheque was endorsed to Kamal
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June 30
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Income tax paid by cheque
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150
|
From the following particulars, prepare Balance Sheet as at $31^{st}$ March, $2019$:
→Following balances appear in the Trial Balance of a firm as on $31^{st}$ March, $2019$:
Prepare Trading Account of the firm.
→|
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₹
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Opening Stock:
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Raw Material
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80,000
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Finished Goods
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1,40,000
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Purchases
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3,60,000
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Sales
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7,00,000
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Returns:
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Purchases
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10,000
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Sales
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6,000
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Wages
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1,30,000
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Factory Expenses
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90,000
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Freight:
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Inwards
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20,000
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Outwards
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30,000
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At the end of the accounting period, stock was:
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Raw Materials
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70,000
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Work-in-Process
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20,000
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Finished Goods
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1,10,000
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Distinguish between a ‘ready-to-use’ and ‘tailored’ accounting software.
Explain the objects of preparing Profit and Loss Account.
On 1st January, 2019, A draws a bill on B for ₹ 1,000 payable after 3 months. Immediately after its acceptance, A sends the bill to his bank for collection. On the due date, the bill was dishonoured. Record the transactions in the Journals of A and B.